Page No 8.117:

Question 46:

A company issued 10,000 shares of the value of ` 10 each , payable ` 3 on application, ` 3 on allotment and ` 4 on the first and final call . All amounts are duly received except the call money on 100 shares . These shares are subsequently forfeited by Directors and are resold as fully paid-up for ` 500 .
Give necessary journal entries for the transactions.

Answer:

Journal
Date	Particulars		L.F.	Debit Amount `	Credit Amount `

	Bank A/c	Dr.		30,000
	To Share Application A/c				30,000
	(Share application money received for 10,000 shares at ` 3 each)

	Share Application A/c	Dr.		30,000
	To Share Capital A/c				30,000
	(Share application money transferred to Share Capital)

	Share Allotment A/c	Dr.		30,000
	To Share Capital A/c				30,000
	(Allotment due on 10,000 shares at ` 3 per shares)

	Bank A/c	Dr.		30,000
	To Share Allotment A/c				30,000
	(Share allotment money received)

	Share First and Final Call A/c	Dr.		40,000
	To Share Capital A/c				40,000
	(First and final call due on 10,000 shares at ` 4 each)

	Bank A/c	Dr.		39,600
	Calls-in-Arrears A/c	Dr.		400
	To Share First and Final Call				40,000
	(First and final call of ` 4 per share received on 9,900 shares, and 100 shares failed to pay it)

	Share Capital A/c	Dr.		1,000
	To Share Forfeiture A/c				600
	To Calls-in-Arrears A/c				400
	(100 shares of ` 10 each forfeited for the non-payment of first and final call ` 4 per share)

	Bank A/c	Dr.		500
	Share Forfeiture A/c	Dr.		500
	To Share Capital A/c				1,000
	(100 shares of ` 10 each re-issued for the sum of ` 500)

	Share Forfeiture A/c	Dr.		100
	To Capital Reserve A/c				100
	(Balance in Share Forfeiture Account after re-issue of shares, transferred to Capital Reserve Account)

Working Note

Shares forfeited account (Dr.)	=	600
Less; Share forfeited account (Cr.)	=	(500)
Balance of share forfeited account after re-issue	=	100
capital reserve(Amount to be transferred) = Balance of share forfeited account =100

Page No 8.117:

Question 47:

X Ltd. forfeited 900 Equity Shares of ` 100 each for the non-payment of allotment money of ` 30 per share and the first call of ` 20 per share. The second and final call of ` 25 per share has not been made . The forfeited shares were reissued for ` 90 per share , ` 75 paid-up. Journalise the above.

Answer:

Application	25	Balancing Figure
Allotment	30
First Call	20
Final Call	25	Un-called
	100

Called-up ` 75 per share

Books of X Limited Journal
Date	Particulars		L.F.	Debit Amount `	Credit Amount `

	Equity Share Capital A/c (900×75)	Dr.		67,500
	To Share Forfeiture A/c				22,500
	To Calls-in-Arrears A/c				45,000
	(900 shares of ` 100 each ` 75 called-up, forfeited for the non-payment sum of allotment ` 30 and first call ` 20 per share)

	Bank A/c	Dr.		81,000
	To Share Capital A/c				67,500
	To Securities Premium A/c				13,500
	(900 shares of ` 100 each re-issued as ` 75 paid-up for ` 90 each)

	Share Forfeiture A/c	Dr.		22,500
	To Capital Reserve A/c				22,500
	(Balance of Share Forfeiture Account after re-issue, transferred to Capital Reserve Account)

Working Notes-

Share forfeiture account credit	=	Share application money received for 900shares
	=	900×25 `.
	=	22,500
Calculation of capital reserve
Share forfeiture account credit	=	22,500
Share forfeiture account debit	=	Nil
Capital reserve	=	22,500

Page No 8.118:

Question 48:

The Directors of M Ltd resolved on 1st May, 2015 that 2,000 Equity Shares of ` 10 each , ` 7.50 paid be forfeited for non-payment of final call of ` 2.50 . On 10th June, 2015, 1,800 of these shares were reissued for ` 6 per share . Give necessary Journal entries.

Answer:

Books of M Limited Journal
Date	Particulars		L.F.	Debit Amount `	Credit Amount `
2012
May 01	Equity Share Capital A/c	Dr.		20,000
	To Share Forfeiture A/c				15,000
	To Call-in-Arrears A/c				5,000
	(2,000 shares of ` 10 each forfeited for non-payment of final call ` 2.5 per share)

June 10	Bank A/c	Dr.		10,800
	Share Forfeiture A/c	Dr.		7,200
	To Share Capital A/c				18,000
	(1,800 shares of ` 10 each re-issued at ` 6 per share fully paid-up)

	Share Forfeiture A/c	Dr.		6,300
	To Capital Reserve A/c				6,300
	(Balance in Shares Forfeiture Account of 1,800 re-issue, transferred to Capital Reserve Account)

Working Notes:

Share Forfeiture	7.5	Cr.
Share Forfeiture	4	Dr.
Balance in Share Forfeiture Account after re-issue	3.5	Cr. per share

Capital Reserve = No. of Shares reissued × Balance in Share Forfeiture Account after reissue (per share)

= 1,800 × ` 3.5 (per share)

= ` 6,300

Page No 8.118:

Question 49:

Journal
Date	Particulars		L.F.	Debit Amount `	Credit Amount `
2014
May 01	Share Capital A/c	Dr.		3,000
	To Share Forfeiture A/c				2,000
	To share first call A/c				1,000
	(200 shares of ` 15 each forfeited for non-payment of first call `5 per share)

May 01	Bank A/c	Dr.		2,000
	Share Forfeiture A/c	Dr.		1,000
	To Share Capital A/c				3,000
	(500 shares of ` 10 each re-issued at ` 15 per share fully paid-up)

May 11	Share Forfeiture A/c	Dr.		1,000
	To Capital Reserve A/c				1,000
	(Balance in Shares Forfeiture Account of 200 shares re-issue, transferred to Capital Reserve Account)

Working note;

Distribution of amount and no. of installment Application and allotment etc.	=	10
First Call	=	5	200 shares
Second and final call	=	5
Total	=	20
No. of shares forfeited and re-issued=200

Page No 8.118:

Question 50:

Super Star Ltd. makes an issue of 10,000 Equity Shares of ` 100 each, payable as:

On application and allotment	` 50 per share,
On first call	` 25 per share,
On second and final call	` 25 per share.

Members holding 400 shares did not pay the second and final call and the shares are duly forfeited, 200 of which are reissued as fully paid-up @ ` 50 per share. Pass journal entries in the books of the company.

Answer:

Book of Super Star Limited Journal
Date	Particulars		L.F.	Debit Amount `	Credit Amount `

	Bank A/c	Dr.		5,00,000
	To Equity Share Application and Allotment A/c				5,00,000
	(Share Application and Allotment money received for 10,000 shares at ` 50 each)

	Equity Share Application and Allotment A/c	Dr.		5,00,000
	To Equity Share Capital A/c				5,00,000
	(Share Application and Allotment money transferred to Equity Share Capital Account)

	Equity Share First Call A/c	Dr.		2,50,000
	To Equity Share Capital A/c				2,50,000
	(Share First Call due on 10,000 shares of ` 25 each)

	Bank A/c	Dr.		2,50,000
	To Equity Share First-Call A/c				2,50,000
	(First Call money received)

	Equity Share Final Call A/c	Dr.		2,50,000
	To Equity Share Capital A/c				2,50,000
	(Equity Share Final Call due on 10,000 shares of ` 25 each)

	Bank A/c	Dr.		2,40,000
	Calls-in-Arrears A/c	Dr.		10,000
	To Equity Share Final Call A/c				2,50,000
	(Share Final Call of ` 25 per share received on 9,600 shares and holders of 400 shares failed to pay it)

	Equity Share Capital A/c	Dr.		40,000
	To Share Forfeiture A/c				30,000
	To Calls-In-Arrears A/c				10,000
	(400 shares of ` 100 each forfeited for the non-payment final call ` 25 per share)

	Bank A/c	Dr.		10,000
	Share Forfeiture A/c	Dr.		10,000
	To Equity Share Capital A/c				20,000
	(200 shares of ` 100 each re-issued at ` 50 per share fully paid-up)

	Share Forfeiture A/c	Dr.		5,000
	To Capital Reserve A/c				5,000
	(Balance in Share Forfeiture of 200 shares of after re-issue, transferred to Capital Reserve)